In the past I’ve given Starwood a hard time over their annual re-categorization of properties. A very hard time, and I think it’s well-deserved. They say their categories are based on the average room rates for a hotel property, but on the hotel categories seem to go up even when room rates stay constant. Starwood introduced category 6 and category 7 and certainly hotels in that category cost more in points even when the rooms themselves don’t cost more.
And I’m especially exercised over Starwood charging double points for ‘all suite’ properties at the highest award categories. A hotel earns its room rates because of the room quality it offers. So it may be a category 6 based on how expensive a night there is. But since all of its rooms are considered suites, they charge double points for it. In other words, they
couldcount the room type against the member twice — it’s a category 6 in the first place because it offers suites, and then they charge double the category 6 price because they only offer suites.
All of this still drives me nuts. But I have to say, now that they’ve announced the new hotel categories for 2011 I really don’t have a problem with the re-categorizations over all, at all. So far we know of about 177 properties moving up or down a category. Starwood had 1,041 hotels at the end of 2010. So 17% change categories, and 83% remain in the same category. What’s more, about as many hotels drop in category as go up. I dumped the numbers into a spreadsheet and counting each category drop or gain (dropping 2 categories is -2, gaining 1 is +1) I come out at -11. On the whole categories are dropping more than they are going up.
Overall, here’s a breakdown of the number of properties moving categories:
- Four properties drop two categories
- Eighty nine drop one category
- Eighty two go up one category
- Two go up two categories
And here’s a breakdown of how they are moving:
- Eleven category 1 properties become category 2
- One category 2 property becomes category 1
- Eighteen category 2 properties become category 3
- One category 3 property becomes category 1
- Thirty seven category 3 properties become category 2
- Thirty one category 3 properties become category 4
- One category 4 property becomes category 2
- Twenty six category 4 properties become category 3
- Fifteen category 4 properties become category 5
- One category 4 property becomes category 6
- One category 5 property becomes category 3
- Eighteen category 5 properties become category 4
- Six category 5 properties become category 6
- One category 6 property becomes category 4
- Six category 6 properties become category 5
- Two category 6 properties become category 7
- One category 7 property becomes category 6
Ric Garrido has a rundown of Starwood hotels financial performance in 2010, based on occupancy and average daily room rates. On the whole rates are flat although some regions like Asia did especially well. On the whole my read is that Starwood thinks that rates have come close to returning to their 2008 levels or at least will be returning to them in 2011. They’ve kept categories flat over the past couple of years, in my view not giving members the benefit of falling room rates, but they aren’t penalizing members now that rates are returning to their earlier levels. I would have liked to see different decision-making in 2010 and 2009. But I’m good with where they are in 2011, based on the limited date I have access to (Starwood keeps it pretty proprietary so I’m looking at overall trends here).
For the past two years, Starwood Preferred Guest has ‘suspended’ peak season award pricing for their highest category hotels. A category 5 property is 12,000 points most of the year, but designated peak season dates rises to 16,000. (A category 6 goes from 20,000 to 25,000.) They’ve brought back this feature of the program’s award pricing in 2011. Frankly that’s fair. Hotel rates and occupancy aren’t off as they were the past two years, they said it was a temporary enhancement and they were true to their word. Such is life, and I can’t fault them here.
My prediction was that Japanese hotels would go up in price because of the appreciation of the yen against the dollar, which is to say the dollar cost of the rooms is higher holding everything else constant. That doesn’t look to be the case.
Some of the changes that stood out to me:
- Lots of Chinese properties going up a category.
- Le Meridien Chiang Rai goes down to category 2. I love that place!
- Westin Macau drops to category 3. It’s been overtaken by the great ‘strip’ casino tech properties, but it’s a nice respite from the glitter of the new Macau and right on the beach. It could use a refurbish but it’s down the sand from Fernando’s restaurant and they treat platinums well.
- Westin Puerto Vallarta is back down to Category 3, at that price it’s a reasonable booking and they treat platinums well also, at least they used to.
- Westin Langkawi, W Seoul, and Westin Sydney are all up to Category 5. That’s probably reasonable but I wish it wasn’t so.
- Sheraton Saigon and Le Royal Meridien Shanghai drop to category 4, I love the former hotel and the latter is generally well-regarded but presumably being overtaken by the newest properties in Shanghai.
- W San Diego drops to category 4, even that seems hopeful to me. Really needs a facelift, way too ‘old W’ and no longer hip.
- W Retreat Koh Samui bumps up to category 7! Even category 6 seemed aggressive to me based on its opening rates, and this is the classic property where the rates drive the category and then they charge you double because they’re all suites. I can’t imagine redeeming 70,000 points per night here in high season when a room is often available for less than $500 per night.
Remember, you have until February 28 to book hotels at the old 2010 points rate. So if you are even considering a stay at a property which is going up in points, book it now, awards are cancellable (as long as you abide by cancellation rules). And if a property you are considering a stay at is going down, you may want to wait a few days (of course you could lock in availability now for your dates and if it’s still available, re-price later).